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STARBUCKS VIA COFFEE

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by

Cheng Leong Tan

on 10 April 2014

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Transcript of STARBUCKS VIA COFFEE

An explicit statement that tells employees what can or cannot be done.
Ex:
Hygiene
Attire
Lateness
Absenteeism


Information accessible and available
Ex:
product
price
promotion
place

Almost face same problems and solve them with same decisions
Easily handle it
Ex:
monthly basis or low stock
STARBUCKS'S DECISION MAKING ON VIA COFFEE BAGS
Factors that Led to the Purchase of Starbucks’s Via Coffee Bags
Characteristics of Decision Making Purchase of Starbucks’s Via Coffee Bag
Decision Making Process of the Purchase of Starbucks’s Via Coffee Bag
Starbucks's Via Coffee Bag Available in Stores NOW!
Starbuck’s Via Coffee Bags Situation
Procedures

A series of sequential steps used to respond to a well-structured problem
Ex:
Sell coffee according to the established purchasing procedure

Procedures
Rules
Policy

Solutions Relies on…

Readily Available

Lower Levels

First line managers
Technical skills
Ex: replenished stock

Structured Problems

Straightforward
Familiar
Easily defined problems

Policy

A guideline for making decisions
Ex:
Promote high quality of coffee
Customers be first and should be satisfied

Rule

Time Frame for Solution is Short

Save time
No need use decision making process to solve problems

Goals are Clear and specific

Know what is needed to be completed
!@#$%&

Repetitive and Routine

Background of the company
American global coffee company
20,891 stores in 62 countries

Serve hot and cold beverages, whole-bean coffee, micro ground instant coffee, full-leaf teas, pastries, and snacks
World Cocoa Foundation
2013
History and Progression of Starbucks
30/3/1971
The first Starbucks (Seattle, Washington)
Three partners met at the University of San Francisco:
English teacher Jerry Baldwin
History teacher Zev Siegl
Writer Gordon Bowker.
Original name: Pequod
During 1987, Added espresso beverages.
Starbucks has opened on average two new stores every day.
1992 Publicly traded company
1996 first store open outside USA and Canada was in Tokyo. Later on, overseas stores constitute almost one third of Starbucks' stores
Sep 29 2013, 19,767 stores worldwide!
Introduced a new line of product: instant coffee bags
Spread all over USA and Canada
Reached targeted sales, but always aware of other established competitors
Starbucks via coffee bags situation
World-wide
Affordable
Convenient
Original
Hiding hEre
Nestle
P & G
VS
Starbucks's VIA
New York City
Seattle
Chicago
London
World Wide
These cities were the very first few cities being exposed to two Starbucks’s Via flavor; Italian Roast and Colombia
Currently available globally in Asia, Europe and across North/South America.

Comes in three packs at the price of $2.95
$9.95 for a 12-packs
For most of the social classes
Gets cheaper as you buy more
Affordable
Cost consumer less than a dollar for a cup of instant coffee.
Proof:
$9.95 divided by 12 packs = $0.82
$2.95 divided by 3 packs = $0.98
In Malaysia RM8 for 3 packs = $2.44
$2.44 divided by 3 packs = $ 0.81
Convenient
Just three simple steps
Enjoyable anywhere you go
Light and mini

Taste similar to Starbucks fresh brewed coffee
Blind 'taste challenge' by people from the global context
Proven by jargons
Original
With instant coffee bags, you can enjoy the same original taste fresh brewed coffee by the barrista at anywhere you go just by following three simple steps
taste
=
External
Opportunities
Internal
Brand: revolutionized coffee drinking experience
Global Factors
Cultural differences: understand different cultural
Standardization and adaptation: led to a smooth operation
International outlet relationship: extensive outlet points act as distribution point
Threats
Over expansion: too rapidly
Factors that Led to the Purchase of Starbucks’s Via Coffee Bags
Internal factors
Strength
Opportunities
External Factors
Weakness
Threat
Global Factors
External
Internal
Product line extension: breakfast item, flavour of beverage
Growth in coffee packet market: annual growth rate
Brand extension: more market share
Change in lifestyle: caffeinated beverage
Dampening of Starbucks name: should not put with other brands
Competition: McDonald, Nestle
High operating cost: distribution cost, property rent, store operating cost
Reliance on one brand: high quality coffee brand
Weakness
Strength
Strong financial: consistent revenue growth
Supporting social issues: fair trade policies, recycling & renewable energy
Loyal customers: show faithfulness
Product: Starbucks Via
Ex:
Produce fresh coffee for customers

Step 1
Step 2
Step 3
Step 4
Identifying a Problem
Right and actual problem.
For Starbucks,
depletion of stock to minimal level
routine stocking interval
Identifying Decision Criteria
Decision criteria based on policy set by main headquarters.
Criteria in policy covers:
quantity of stock left
expiry date of Starbucks Via
date of delivery
Allocating Weights to the Criteria
Prioritize criteria
Decision making will be more effective
expiry date > date of delivery > quantity
All are equally important
Developing Alternatives
Not applicable in purchasing of Starbucks Via.
Structured problem
Straight forward, easily defined.
Step 5
Step 6
Step 7
Step 8
Analyzing Alternatives
No alternative in purchased of Starbucks Via.
This step is omited.
Selecting an Alternative
Only one alternative.
Place order for Starbucks Via from same supplier following the policy.
Implementing the Alternative
Put decision into action
Get parties that are involved into decision making
For Starbucks:
Customer's feedback
Evaluating Decision Effectiveness
Determine whether problem is solved.
Redo earlier steps if problem still exist.
For Starbucks Via,
depleted stock overcome by placing order
Feedback from customers and storekeeper
Tan Cheng Leong (J14014870)
Jonathan Chng Yew Jin (J14014353)
Tan Cheng Hui (J14014649)
Richard Ooi Chin Oung (J14014314)
Lim Xiao Jing (J14014773)

In Conclusion
Consists of four important steps
Understanding the current situation
Understanding the environmental factors
Determine the characteristic of the decision making
Understanding the process of decision making
CEO Mr Howard Schultz
Full transcript